For the time being, we should focus on the smallest details. However, the technique used by the Russian company might damage EU reserves for the next winter. Despite the fact that LNG exports from the United States have come to a grinding stop.
For the time being, they are only pinpricks: Gazprom has communicated a temporary reduction of its gas supplies to Germany through Nord Stream by 40 percent, while Eni has reported a fall, always temporary it appears, in flows from the gas fields of 15 percent. Both of these reductions will take effect in the coming weeks. Russian behemoth. Although it may lead to higher gas prices in the short term, the immediate impact of these reduction will not be alarming, as is the consensus among experts. The problem, if there is one, is determining whether or not these reductions are the start of a precise strategy devised by Gazprom with the intention of preventing the European Union from achieving the goal that was established to ensure a calmer winter in terms of energy security, which is the filling of energy reserves at 80 percent.
In point of fact, Germany and Italy are the two most important storage hubs in the EU. Their respective capacities are 245 TWh and 197 TWh. They are responsible for forty percent of the block's potential reserves when taken together. If we include Austria, which is a nation that is dependent on the same Russian gas pipeline that arrives in Italy, and the Netherlands, which is a country whose primary storage facility is managed by Gazprom itself, then the proportion is more than 60 percent. Because of this, the plan that the European Commission proposed in March to refill inventories for the next winter (and diminish Moscow's blackmail ability) relies mainly on the reserves that each of these member nations have.
The most recent experience bears this out: in 2021, that is to say, before the situation in Ukraine, Gazprom curtailed the flow of gas from its taps into Europe, which had the effect of bringing EU reserves down to their lowest levels since 2018; (in November they were below 80 percent of storage compared to almost 100 percent in 2019). That marked the beginning of a downward cycle of price hikes, which was further worsened by the effects of the war. "At the moment there is no indication of risks for the supply of supplies," and "the filling levels of gas stocks in the EU are now around 52-53 percent, above last year's level," said Tim McPhie, spokesman for the European Commission. The mechanism could recur now, giving a slap in the face to the Brussels projects: "At the moment there is no indication of risks for the supply of supplies." Which is accurate, but it just tells part of the truth about the situation.
The current stock fill is somewhat greater than it was during the same time in 2021, but it is substantially lower than it was in prior years, when it was significantly more than 60 percent. In addition, there are nations like as Austria and the Netherlands that are far lower than the average for the EU. What will happen if Gazprom decreases its supply in the next months? Germany and Italy are now at 55 percent, but they were 70 percent in June of this year. It seems like this summer is going to be a scorcher, and not only in terms of geopolitics: the weather projections are predicting a record-breaking heat wave that will not only affect southern regions but will even reach certain northern regions of Europe. This will undoubtedly have an impact on the amount of power that is used.
In addition, Gazprom's move—which up to this point has essentially been an appeal to technical difficulties and the effects of EU sanctions, at least in the case of Nord Stream—comes only a few days before the fire that briefly rendered the Freeport terminal inoperable. in the state of Texas, which serves as a major distribution point for the export of liquefied natural gas (LNG) from the United States to the rest of the globe. As is common knowledge, the agreement that was signed in Brussels by Vice President Joe Biden and by the President of the European Union Commission, Ursula von der Leyen, provides for the commitment of the United States to increase its LNG supplies this year in order to compensate for any reductions on the side. Ursula von der Leyen is the President of the European Union Commission. Russian. The difficulties experienced at the Texan terminal are not welcome news in this regard: the administrators of the
It is true that the European Union (EU) is attempting to pump as much natural gas as it can from other sources, such as gas pipelines coming from Algeria, Norway, and Azerbaijan, as well as liquefied natural gas (LNG) coming from Nigeria and Algeria itself. However, if Gazprom continues its plan of reducing supplies, industry analysts are skeptical that these options would be sufficient to meet the 80 percent storage objective by November as required by Brussels. An expert at Wood Mackenzie named Kateryna Filippenko said that "it is most probable in the EU that the storage will wind up being little over half (of the total capacity, ed), maybe around 54 percent." According to Filippenko, this might result in difficulties for the business since Europe will want to safeguard vulnerable customers by placing restrictions on the use of industrial gas.
The city of Brussels claims to be calm at the moment. During tomorrow's meeting of the Gas Coordination Group, or the working group composed of senior officials of the competent authorities of the Member States for safety and procurement, as well as the European Agency Acer and the Trade Organization Entsog, the problem of cuts in gas supplies by the Russian giant Gazprom will be discussed, according to a source within the EU.